Australian treasurer defends economic record ahead of expected interest rate hike

Australian Treasurer Jim Chalmers has defended his government's economic record ahead of what is widely expected to be the fourth interest rate rise of the year. The Reserve Bank of Australia's board is poised to lift the cash rate from 4.35% to 4.6% on Tuesday, a move that would push typical home loan interest rates to around 6.5%.

In television appearances, Chalmers stressed that the country's persistent inflation challenge is being significantly worsened by events elsewhere in the world, particularly the war in the Middle East. He said the conflict involving Iran has driven up global oil prices, which he described as one of the major factors behind the inflation Australian families are currently dealing with.

The treasurer acknowledged that people are under pressure and that further interest rate increases add to that burden, but said the government accepts its share of responsibility in the fight against inflation. He noted the government has focused on building savings and delivering budget surpluses to bring down government debt, while also addressing longer-term economic challenges.

Chalmers argued that, given the difficult global circumstances, Australia is performing relatively well compared with other economies, though he acknowledged there is still considerable work ahead to ensure the country continues to outperform the rest of the world.

If the Reserve Bank does raise the cash rate on Tuesday as expected, it would mark the fourth such increase in 2026, underscoring the continued difficulty of bringing inflation under control.